I still have yet to see any serious explanation as to why Congress absolutely must act within the next week to bail out the financial industry. I’m not saying that it’s not true–only that no one has come up with any justification for it. On ABC this morning, Chris Dodd ran through the parade of horribles, but didn’t connect any of it to a trillion dollar bailout; indeed, he just alluded to “what we’ve been told we must do.”
I’m tired of this, of people on Wall Street saying that other people on Wall Street will be Very Worried and Lose Confidence if you don’t do what they want. It’s just not good enough anymore.
Atrios asked the right question a few days ago, noting that last Monday, Paulson had refused to bail out Lehman Brothers, and was lionized as standing firm:
What changed between Monday and Friday? What new information did you have at the end of the week that you did not have at the beginning of the week which caused you to go from $0 to $1 trillion?
Democrats should simply ignore the administration proposal, and write their own–perhaps, as Sebastian Mallaby suggested yesterday (reporting ideas from economists at the well-known Marxist redoubts of the University of Chicago and the Brookings Institution), that the government should either buy equity shares in the banks themselves, or mandate banks to issue new equity and stop dividend payments.
And yes: New Deal or no deal. SCHIP, card check, the works. If this is so damn important to the administration, then they’ll make a deal. And if it’s not, then we will know that they are bluffing.
I’m in the middle of Bart Gellman’s wonderful (and frightening) new book Angler: the Cheney Vice Presidency. In an early chapter, he recounts how Cheney simply ignored the narrowness of the 2000 election results and went ahead with pushing a maximal conservative position at all times. His motto, which eventually became the administration mantra:
You don’t negotiate against yourself.
It’s really not a hard idea to understand. As Mark notes, the bailout idea is not popular. Now we have the negotiating leverage. We should use it.
And Obama should not hesitate to throw the party leadership under the bus if they don’t.